@dmertz I sent email to the IRA custodian since it’s the weekend. Will call them tomorrow.
on the meantime, I did a little research myself on the codes. Regardless what they told me on the phone before (regular distribution), it seems code 8 is correct for this situation:
“According to the 2020 Instructions for Forms 1099-R and 5498, Code 8, Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2020, signifies that excess contributions were deposited and returned in the same year (regardless of the year for which the excess was attributed). For example, use code 8 to report a contribution deposited in April 2020 for tax year 2019 and later removed in 2020.
Code 8 may be used with codes 1, 2, 4, B, J, or K.”
You mentioned that If I did do this correctly for tax return 2019 (corrected before October 15th 2020), the correct code would be 8J. So even if this is done on time, the earning is still treated as early distribution (box 2a) and subject 10% fine plus tax?
